The Hope of Kenya’s ‘Equity Generation’

Many middle-class Kenyans who came of age in the mid-1980s, when pervasive corruption vastly restricted work opportunities, have found their way to the economic mainstream, says Kenyan writer Binyavanga Wainaina in the latest issue of Vanity Fair (no link available). Mr. Wainaina dubs them the Equity Generation, the young people who survived the hard last years of President Daniel arap Moi’s Kenya that ended in 2002. The name derives from Kenya’s largest bank by customers, Equity Bank. It has actively pursued low-income clients spurned by its competitors in the 1990s, symbolizing to Mr. Wainaina how the bustling informal economy of the Moi years has evolved into a more stable and legitimate framework.

Mr. Wainaina’s Equity Generation had degrees and professional qualifications, but often spent the late 1990s performing menial tasks abroad or else lurched from one black-market scheme in Nairobi to another. In between short-term business schemes, says Mr. Wainaina, partying ruled the day.

“In 2000, Nairobi was one big bar,” says Mr. Wainaina. Deterred by high banking fees and institutionalized corruption and bias, many of Mr. Wainaina’s peers sought to spend their income immediately rather than try to save. Without family connections, Mr. Wainaina said it was almost impossible for young people to obtain lucrative jobs in the government or with big businesses. Instead, people turned to opportunities in the black market to make a quick buck. Abandoned offices became informal giant markets with tiny stalls, with a floor of one building sometimes hosting hundreds of vendors.

An economic turnaround accompanied the stability and political openness that followed Mr. Moi’s departure. The small stalls in abandoned offices have organized themselves into Kenya’s formal retail industry. Even the famously anarchic minibus taxis of Nairobi have a representative in the formal economy: the Double M shuttle-bus service, known for its careful and tidy drivers. The company’s owner proudly declares that she pays taxes. Kenya still needs to deal with corruption, expand its capital base and improve the lot of the 46% of Kenyans who live below the poverty line. But Mr. Wainaina finds hope in recent revelations about several recent corruption scandals — unlike during the Moi era, the misdeeds were uncovered before they had gone on long enough to do lasting economic or political damage.

This week’s Economist finds some other signs of hope in Kenya. They echo Mr. Wainaina’s analysis when they say, “Where the country has done well, it is often despite rather than because of the government. When Kenyans have been able to do things off their own bat, they have invariably done better than when they have been locked into state-controlled schemes.” — Robin Moroney